Skip to main content
California Department of Education Logo

Reporting the Value of USDA Foods


Nutrition Services Division Management Bulletin

Purpose: Policy, Action Required, Beneficial Information

To: Public School Districts and County Offices of Education Receiving U.S. Department of Agriculture Foods

Attention: Child Nutrition Operators and Chief Business Officials

Number: FDP-03-2018

Date: March 2018

Reference: Title 2, Code of Federal Regulations, Section 200.502(g) and Part 200, Appendix VII, Item C; Title 7, Code of Federal Regulations, Section 250.58(e); U.S. Department of Agriculture Policy Memorandum FD 104: Value of USDA Donated Foods for Audits (Revised); U.S. Department of Agriculture Policy Memorandum SP 60-2016: Indirect Cost Guidance; California School Accounting Manual, Procedure 915, Indirect Costs

Subject: Reporting the Value of U.S. Department of Agriculture Foods in the Calculation of the Indirect Cost Rate


In accordance with Title 2, Code of Federal Regulations (2 CFR), Part 200, Appendix VII, Item C, the California Department of Education (CDE) and the U.S. Department of Education negotiated to include food costs in the indirect cost rate. The CDE recognizes that the U.S. Department of Agriculture (USDA) Policy Memorandum SP 60-2016: Indirect Cost Guidance, instructs school food authorities (SFA) to exclude food costs from the indirect cost rate; however, the CDE negotiated restricted indirect rate supersedes this policy guidance. SFAs are instructed to follow the California School Accounting Manual (CSAM) accounting procedures on how to properly account for their food costs. Additionally, this management bulletin instructs SFAs that they must value the USDA Foods received each program year at their fair market value.

Valuation of USDA Foods

In accordance with 2 CFR, Section 200.502(g), USDA Foods must be valued at either fair market value at the time of receipt (excluding nonfood items) or by using one of the following USDA Foods valuation methods included in Title 7, Code of Federal Regulations, Section 250.58(e):

  • The cost per pound of USDA Foods using the annual prices posted by the USDA, which are found on the USDA Food Distribution Processor Material Prices web page at https://www.fns.usda.gov/fdd/processor-material-prices.

  • The most recently published cost-per-pound price in the USDA Foods catalog at the time of an order found in the Food and Nutrition Service electronic USDA Web-based Supply Chain Management (WBSCM) system.

  • The average of each USDA Foods price based on the state’s USDA Foods orders in WBSCM. To calculate the average, all prices for a particular USDA Foods are averaged together to get an average cost per pound for the item for the current fiscal year. The CDE uses this valuation method for USDA Foods prices in the Child Nutrition Information and Payment System, which can be accessed from the Statement of Commodities Shipped Report.

For additional information on how to report the value of USDA Foods when calculating the indirect cost rate, refer to the CSAM, Procedure 915, Indirect Cost Rate.

Contact Information

For questions regarding the valuing of USDA Foods, please contact Amy Bell, Child Nutrition Consultant, Food Administration Unit, by phone at 916-322-5051 or by email at abell@cde.ca.gov.

For questions regarding indirect cost rate determinations, please visit the CDE Frequently Asked Questions about Indirect Costs web page at https://www.cde.ca.gov/fg/ac/ic/icrfaq.asp or email the CDE Financial Accountability and Information Services Office at sacsinfo@cde.ca.gov.

Questions:   Nutrition Services Division | 800-952-5609
Last Reviewed: Wednesday, June 25, 2025
Related Content
Recently Posted in Nutrition
  • REQUIRED: 2025–26 FFVP Orientation Trainings (added 15-Aug-2025)
    The CDE NSD requires all 2025–26 FFVP grantees to complete the mandatory FFVP Orientation Online Training Series before implementing the FFVP. The training series must be completed by no later than Monday, September 15, 2025, at 5 p.m. PST.
  • Action Required: Excess Net Cash Resources (added 12-Aug-2025)
    Provides information to program operators about excess net cash resources, the budget agreement process, and long-term noncompliance.
  • SNP Reimbursement Rates for 2025-26 (added 12-Aug-2025)
    This web page provides the School Nutrition Programs (SNP) reimbursement rates for the 2025-26 school year.
  • 2024 Turnip the Beet Award Winners (added 12-Aug-2025)
    The California Department of Education Nutrition Services Division would like to congratulate 21 California school districts for receiving a 2024 Turnip the Beet Award from the U.S. Department of Agriculture Food and Nutrition Service.
  • May 27, 2025 Tuesday at 2 Town Hall Resources (added 12-Aug-2025)
    The California Department of Education (CDE) Nutrition Services Division (NSD) hosted the monthly Tuesday @ 2 School Nutrition Town Hall webinar May 27, 2025.

  • June 24, 2025 Tuesday at 2 Town Hall Resources (added 12-Aug-2025)
    The California Department of Education (CDE) Nutrition Services Division (NSD) hosted the monthly Tuesday @ 2 School Nutrition Town Hall webinar June 24, 2025.
  • Chef Ann Healthy School Food Pathway Fellowship (added 12-Aug-2025)
    The Chef Ann Foundation is accepting applications for the 2026 Healthy School Food Pathway Fellowship Program. This fellowship supports the development of school food leaders who can support a sustainable program centered around scratch-cooked meals.
  • Webinar: Tuesday at 2 School Nutrition Town Hall (added 04-Aug-2025)
    School Nutrition Town Hall webinar for School Nutrition Program Operators and Food Service Directors.
  • CNAC Minutes for the November 2, 2023 Meeting (added 31-Jul-2025)
    Meeting minutes for the State Superintendent of Public Instruction Child Nutrition Advisory Council (CNAC) on November 2, 2023.
  • Next Steps: 2025–26 FFVP Grant Recipients (added 30-Jul-2025)
    On July 28, 2025, the CDE NSD awarded and posted the FFVP first allocation grant recipients and funding allocations for School Year 2025–26 on the CDE FFVP Funding Results web page. The FFVP first allocation is July 1, 2025–September 30, 2025.